Tata Power, NTPC, Power Grid, ACME Solar: 4 power stocks to buy, target prices

Tata Power, NTPC, Power Grid, and ACME Solar are IIFL Securities' top power sector picks. The domestic brokerage said India’s electricity demand showed only a modest recovery in September. with the peak daytime and evening demand rising 1 per cent and 5 per cent year-on-year (YoY) respectively in the first 19 days of September 2025. 

IIFL Securities likes defensive plays like NTPC (Buy, target price: Rs 405 per share) and Power Grid (Buy, target price: Rs 365). It also has preference for diversified developers such as Tata Power (Buy, target price: Rs 445), and stocks with margin of safety like Acme Solar (Buy, target price: Rs 335). Acme Solar has a superior positioning on IIFL's RE Developer Evaluation Framework.

"Stocks highly exposed to spot power prices, including JSW Energy, are less attractive amid weak demand and strong capacity additions potentially eroding merchant profits," IIFL Securities said.

Year-to-date growth remains weak, with daytime demand down 3 per cent and evening up just 1 per cent, it said adding that base demand has largely been flat, despite a 3.5 per cent increase in early September.

IIFL Securities highlighted that nearly 45GW of new capacity additions over the last 12 months, coupled with strong renewable and hydro generation, have kept coal plant utilisation and merchant power realisations low. With only 30–45 days of the traditional high-demand period remaining in FY26, the brokerage continues to favour defensive and diversified power stocks.

Renewable capacity (excluding hydro) rose about 40GW in the last year, boosting generation by 843MUs YoY (up 6 per cent), even as curtailments increased. Hydro generation nearly doubled YoY (up 96 per cent), resulting in a 7BU decline (down 10 per cent) in thermal output despite coal capacity additions. Weak demand and solar overproduction have kept Real Time Market (RTM) prices subdued, with around 21GW of solar power unsold during September 1–19, even at sub-Rs1/kWh clearing prices.

Day Ahead Market (DAM) and RTM liquidity remained comfortable, reflecting subdued demand and large capacity additions, with weighted average clearing prices down 9 per cent YoY. Coal inventories are stable, and dispatches rose 5 per cent YoY in August after three months of decline.